What 'Sale Pending' Means and Good Information to Know
When you're browsing for homes through online listings or drive through a neighborhood looking at for-sale signs you may come across a sale pending status. Some people may think that this means the house has pretty much already been sold. But there is some good detailed information to know about what exactly a sale pending status means for both buyers and sellers.
What does pending mean in the real estate world?
The sale pending status occurs when the home seller has accepted an offer and the offer contract has been signed by both the buying and selling parties. This means that the home is no longer considered an active listing on the multiple listing service.
The specific terms of whether a home sale is considered pending can vary depending upon location. In some areas pending could mean that the home is in due diligence. Where the property is undergoing inspection and appraisal. In other areas, it could be posted as pending after this due diligence phase. It could be a way of communicating that the sale is still in negotiation and has not officially closed.
Tips to help prevent a pending sale from falling through
Even after an offer has been accepted by the homeowner and both parties agree, a sale still has the potential to fall through. These are the most common reasons why home sales fall through after they are pending and how to try and avoid them:
Mortgage loan
Even after a buyer makes an offer on a home and the homeowner accepts that offer it is possible that the lender will not approve the home loan enabling the buyer to close on the purchase of the home. A big step in helping to prevent this is to make sure that the buyer has preapproval of their mortgage. This is still not a foolproof plan but it does help significantly.
Inspection
There could be some major issues uncovered during the home inspection like major structural damage or a leaking roof that does not meet current building codes and can lead to a buyer walking away. It's always best for buyers to know what inspection issues are dealbreakers before putting an offer in on a home and where their threshold lies. Sellers can help eliminate surprise problems with a pre-listing inspection allowing them insight into the current condition of their home before listing it for sale.
Appraisal
With so many people entering into bidding wars it is not uncommon for the last few years for some buyers to offer above list price for a home. In some situations, this has caused an appraisal gap where the official appraisal on a home comes in below the amount of money offered to purchase the home. If the buyer is trying to seek mortgage approval this could mean a setback as lenders will not lend out more money than a property is worth. Buyers should make sure they are not getting caught up in bidding wars or make sure they have cash on hand to cover the difference of what their lender will not lend. Sellers should also make sure they are working with their trusted real estate agent to set a fair market value list price and also be careful in accepting any offer above the list price.
Can someone make an offer on a pending home?
If you are house hunting and frustrated by the low inventory and see a home that is still listed online but has a pending status can you still make an offer?
Most often the listing agent will no longer be accepting offers when the property has gone into a pending status. But it is possible for a pending sale to fall through for many different reasons including the top three listed above so a pending sale is never a finalized one.
You may not be able to submit a formal offer but you could talk with your real estate agent and ask them to get in touch with the listing agent to inquire about getting a heads up if the sale falls through for any reason. Just be aware that this might mean that there are issues with the home, but it could also mean that it was an issue with the financing and you could end up finding a home you love in a unique way. Just don't sit around waiting for the sale to fall through; continue on with your shopping for other homes.
For more information on purchasing a home in Columbus and surrounding areas please contact us at any time.
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